July 2026 Vol. 81 No. 7
Editor's Log
Data center boom brings new opportunities and familiar challenges
By Robert Carpenter, Editor-in-Chief
It's a good year to be involved in underground infrastructure work.
I recently recorded a podcast with Chris Jones, chief commercial officer of HardRock Infrastructure. He has a keen eye and observant mind for the horizontal directional drilling industry and reports that large-rig HDD is experiencing a record bounce-back from recent struggles. Chris outlined a plethora of factors creating a perfect storm for an aggressive HDD market.
As accounted in this issue by our financial columnist Daniel Schumate, managing director of FMI Capital Advisors Inc., most underground infrastructure markets are posting a very strong 2026 "driven by data center growth, rising power demand, grid investment and continued water and wastewater pipeline work. The impact of the data center segment, in particular, continues to pull dollars and contractors toward these large opportunities with strong margin potential."
Michael Render, owner/principal of RVA, has written the book on the growth of the fiber/telecom market. He has tracked markets annually for decades, generating extensive and incredibly insightful research. RVA projects annual deployment of fiber to the home (FTTH) in the United States will be at record levels during the next five years, with a forecast of nearly $200 billion spent on fiber deployment during the period.
This is just a tiny fraction of the good news that keeps sweeping over the underground infrastructure markets from a variety of reliable sources, both direct and via large numbers of expert analysts. Over the last two years, and especially as we entered 2026, underground markets demonstrated amazing strength, driving strong momentum. In fact, many markets are – dare I say it – in boom mode.
Data center deployment has become the wildcard, providing additional strength across many fields. The infrastructure demands for these facilities are massive on a scale that the world has never seen. Those needs include:
- Pipeline expansion to supply natural gas, which has become the fuel of choice for power generation facilities due to availability, competitive pricing and overall better efficiency and environmentally friendly qualities.
- Data center operations consume power at overwhelming rates, which leads to incredible demand for electricity. Nowadays, power generation facilities capable of powering small cities are being built onsite rather than coming from a traditional power plant.
- Mountainous needs exist for massive high-speed fiber networks to control the flow of data necessary for AI protocols.
- Water, primarily to cool all the immense heat generated by varied data center apparatus, also must be identified, rights secured and pipelines constructed to transport the blue gold to the sites.
Add these factors together and it is no wonder that contractors are struggling to keep pace at the breakneck speeds required to produce effective data centers. Industry is demanding nothing less and continues to conceive and seek to build at an almost emergency basis.
We also mentioned the need for bodacious amounts of water in the data centers. This is occurring in a country that, like much of the world, is already experiencing water shortages in many areas of the nation, especially the West.
While water will remain a vital component, the amount necessary for operations is slowing, thanks to research and development into conservation and recycling, reducing the quantities of water necessary for each data center.
Other inhibitors to growth are towns themselves. While most cities and regions embrace the potential economic explosion that data centers bring, some remain cautious. They want to know the scope of disruption to their communities, the amount of local water sources that will be absorbed, traffic and road problems, and just how the quality of life will be impacted.
These cities are not allowing data centers unless there are adequate assurances that the local area will be protected. Still, the golden goose is often actively pursued by local governments, so this type of resistance will probably be rare or even short-lived.
Labor continues to be inadequate to fill the jobs needed for infrastructure work. It's been a problem for decades and in this age of utility and pipeline expansion, it is only getting worse. Long-time workers are retiring, but there are precious few experienced workers to fill those shoes or even new qualified workers to be trained. It's a challenge that just never seems to end.
Another old problem rearing its ugly head is the lack of equipment and supplies. Long waits complicate tight construction and rehabilitation schedules. Slowing projects cost precious investment funds.
The subsequent mobilization to provide utilities for data centers is still somewhat vague as needs and requirements are continuously refined and recalibrated. There remain some very serious concerns about potential inhibitors to growth. But for every problem, solutions are already being theorized and developed while the frantic construction pace grows stronger.
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